Nomura launches service to help clients unwind cross shareholdings
17/02/2022 09:17
By Makiko Yamazaki and Yuki Nitta
TOKYO, Feb 17 (Reuters) - Nomura Holdings Inc's 8604.T
trust banking unit has launched a service that helps client
firms unwind cross-shareholding, a longstanding practice in
Japan that critics say could insulate management and undermine
corporate governance.
Cross shareholding, where companies take stakes in partners
to cement relationships, has been discouraged by Japan's
corporate governance code. However, nearly a third of the
country's $7 trillion stock market is still owned by such
corporate shareholders.
The new service allows the issuing company to set up a trust
fund at Nomura's trust banking unit, which buys stocks from
cross shareholders in off-floor trading and gradually sells them
on the market in a certain period of time.
The scheme helps ease the price impact from a large-volume
share sale and also allows large cross shareholders to offload
their holdings without a discount to the market price typical of
block trades.
"We expect to have about 30 deals over the next three
years," Ryo Miyajima, managing director at Nomura's equity
product solutions department, told Reuters in an interview on
Thursday.
It has drawn interest from companies scrambling to increase
tradable shares, Miyajima said, as the Tokyo bourse is
introducing stricter liquidity rules for its prestigious main
board, making it tough for those largely owned by parent
companies or business partners.
Digital marketing company Cross Marketing Group Inc 3675.T
was the first to set up such a trust fund this week, buying an
8% stake from its second-largest shareholder.
(Reporting by Makiko Yamazaki; Editing by Kim Coghill)
((Makiko.Yamazaki@thomsonreuters.com; +81-3-4563-2805;))